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Pork Futures: Most Hogs Gain

by 5m Editor
29 November 2007, at 9:38am

CHICAGO - Chicago Mercantile Exchange lean hogs finished mostly firm on last-minute short covering, fund buying and February/June forward positioning.

Earlier, pork futures periodically traded in slightly positive trading territory driven by generally steady to firm initial cash prices. What's more, Tuesday's $1.31 pork cutout leap triggered short covering.

By the same token, potential fundamental fallout as a result of huge hog kills before the Christmas holiday tempered buying and sparked selling into upticks.

Additionally, gradually tightening calculated packer profit margins, slightly higher Iowa/Southern Minnesota hog weights and board premiums to CME's hog barometer at times kept a lid on front months.

Also, lower midday direct hogs prices sometimes forced spot-December into negative trading territory.

Meanwhile, some prospective hog futures buyers shied away from distant contracts because of CBOT corn's erratic behavior. At the same time, other market participants worked July/August bear spreads.

Country hog buyers anticipate mostly steady cash hog bids for Thursday depending on packer needs heading into the weekend. Industry sources project Saturday's kill at around 230,000 head.

Futures are expected to move sideways over the next few weeks as traders speculate about where the spot month and CME's hog index will converge when December expires on Dec. 14.

Source: FXSTREET.com

5m Editor